Daily Market Update

U.S. Dollar sees reprieve as global markets rise

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The U.S. Dollar picked up steam over the weekend in defiance of desire for its downfall and positive news on the Chinese negotiations front.

Overview

President Donald Trump spoke at a political conference over the weekend explaining his wishes of a more competitive economy via a cheaper buck. As he has consistently done previously on monetary matters, he criticized the Federal Reserve for having hiked rates in what he considers was an unnecessary pace. However, the greenback has not flinched and its rise is currently correlating with optimism across stocks.

We only have Construction Spending for stat purposes today, but a slew of data is due tomorrow including manufacturing and home gauges. The Employment Situation will give us a clearer picture of the economy on Friday and some central bank action in Canada and Europe in the middle will provide for volatility in FX flows.

What to Watch Today…

EUR

The Euro fell in February by over half a percent in the face of economic challenges in the Euro-zone and slow path towards resolving the trade issues at hand globally that include Brexit and China-U.S. tariffs. Nevertheless, numbers across the Euro-bloc Friday showed expansions in Retail Sales in Germany, Manufacturing growth in France, and ultimately a higher Producer Price Index pace for the whole area.

It is possible that a return to solid economic performance can lead to a return to gains for the Euro in March. Certainly, we would welcome a turnaround and think it is realistic. We shall start with Gross Domestic Product and the European Central Bank meeting on Thursday.

CAD

The Canadian dollar plummeted over the weekend following Friday’s revelation of contraction in the month of December when measuring the country’s Gross Domestic Product growth. Although the expectation was of no expansion, the (-0.1%) contraction adds to concern that more help may be needed to boost the economy, which is barely grew at a 0.4% quarterly pace, way below the expected 1.0% for Q4 2018.

With a recent return to losses in oil prices, the “Loonie’s” only chance for resurgence will be based on the ratification of the USMCA Trade Pact, only signed not yet implemented, and improvement to economic indicators. The Bank of Canada will be meeting on Wednesday and could move the currency more to the downside.

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